Credit card issuers and businesses provide many methods of credit card fraud protection. These help to protect your account from fraudulent usage. Review some of these methods here for a better understanding of how credit card fraud protection works.Bank Safeguards
The first safeguard your bank provides is verification procedures each time you call in. Your bank has to verify that it is truly you that they are speaking with. They do this by collecting a password or an answer to a security question when you apply for the credit card. The password has to be verified by you and authorized users at the beginning of each call about the account. Your credit card issuer will not discuss your account with anyone except yourself and verified authorized users.
Secondly, when you receive a new credit card, it needs activated. A block is placed on the card until you call to activate it. Activating the credit card requires that you answer a few security questions correctly. Once the card is activated, you’ll be able to use it without any problems. This protects the account against unauthorized use if it falls in the wrong hands while in transit to you.
Some customers misunderstand card activation. They believe that it is “opening” the account. This is not the case, your account is opened as soon as you apply and are approved for the credit card. If you decide that you don’t want the account, call and close it. Simply not activating the card and cutting it up is not closing the account. The account will reflect open on your credit bureau report until you call.
A few banks out there offer the option to have your photo on your credit card. This option provides a little protection if your card is stolen. It may still be used fraudulently at self checkouts, but it helps to cut down on fraudulent face to face transactions. Call your credit card issuer to see if this option is available. If it is, your bank will send you a form to fill out and send your photo in with. You usually receive the new card in a few weeks.
Another form of credit card fraud protection is the non release of sensitive information by your credit card issuer. Have you ever tried to contact your credit card issuer to get your card number or expiration date? If so, you found that your credit card issuer will not release this type of information. It protects you and them against unauthorized use. Other information that your credit card issuer should never provide to anyone includes the following:
Social Security Number
Date of Birth
Card Verification Code
(the last 3 numbers on the signature strip of your card)
Mothers Maiden Name or Passwords
Customer Names, Addresses, and Phone Numbers
The final method of credit card fraud protection offered by banks I’m going to discuss is early fraud detection. Early fraud detection monitors your credit card account for suspicious activity.
Read a detailed explanation of credit card fraud detection.Merchant Safeguards
A form of credit card fraud protection merchants use is address verification. Address verification is mainly used by mail, phone, and internet vendors. When you place an order with these types of merchants, they will contact your credit card issuer to verify that the billing and shipping addresses match what you provided on the order. If they don’t match, the vendor may not process your order.
Call your credit card customer service if you plan to have an order shipped to an alternate address. They can note the alternate address to your account. This allows your order to processed efficiently and prevent fraud. Keep in mind, your credit card issuer will only verify with a yes or no if the address matches. They will not provide your address to the merchant.
One final method of credit card fraud protection requires verification of your billing ZIP code when making a gas purchase at the pump. Not all gas stations currently require this step. It’s usually just stations in areas that have high rates of fraud. If you don’t experience this in your area, you may run into it if you’re traveling.
Credit card fraud protection rules will always be around. Card companies and merchants both create new safeguards for your accounts each year. I’ve written about just a few here. I’m sure there are many out there I’m not aware of. Contact me if you have any specific questions concerning credit card fraud protection.